Mortgage rates edged lower once again this week, meaning prospective buyers enjoyed a straight month of declining borrowing costs.
According to Moneyfacts, the average rate on a two-year fixed mortgage fell from 5.4685% on Monday to 5.4603% as of Friday.
Rates had dropped in the three successive weeks prior, having sat at 5.5252% a month ago.
Major banks have been among those to cut rates recently in a reverse on hikes made since early October.
NatWest Group PLC (LSE:NWG), Barclays PLC (LSE:BARC) and Banco Santander (LSE:BNC) announced reductions most recently last week.
Aaron Strutt, director at mortgage broker Trinity Financial, noted rates could fall below the 4% come early next year as lenders continued to battle for prospective buyers.
“Two, three and five-year fixes are already edging closer to 4% which will come as welcome news to those hoping to get on the property ladder,” he said.
The Bank of England’s move to hold its key interest rate at 4.75% on Thursday has clouded the outlook for borrowers though, after policymakers pointed to uncertainty around both inflation and the deteriorating economic outlook.
“We think a gradual approach to future interest rate cuts remains right, but with the heightened uncertainty in the economy we can’t commit to when or by how much we will cut rates in the coming year,” governor Andrew Bailey had said.